Accounting is not just listing the credits and debits. It’s more than that.

Accounting is regular
and extensive recording of financial transaction relating to business. Accounting important to
summarizing, analysing, and reporting the transaction to related agencies, employers, customers,
taxation agencies and government. For large business, this is a very huge and complex task.
Accounting is not a modern concept. It has very great history. It was gradually developed in
thousands of years. History of Accounting can be divided to four main stages
 Emergent Stage
 Pre-analytic stage
 Development or explanatory stage
 Modern age

Emergent Stage
This stage included primitive to 1494 AD. In
stone stage people noted their hunted animals and
collected food by marking sticks or anther symbols on
trees or cave wall lines. Actually these are not close
things accounting but these were the foundation to
begin accounting. To find the beginning of book
keeping we should go to Mesopotamia civilization in
time between early 3300 to 2000 BCE. It is related to
developments in writing, counting and money by
early lived Egyptians and Babylonians. Historians says, Accounting is a primary reason for
development of writing. After some period of times Chanakya who lived in India in Mauryan Empire,
wrote a script similar to financial account. His book called ‘Arthashasthra’ include some details about
how keep accounting book for the kingdom.
In 13th century medieval Europe was directed to monetary economy. At that time trading and
business were depend on book keeping and accounting systems because the beginning of methodical
government taxes, bank loans and use of proper money. In 1458 Benedetto Cotrugli introduced Double
entry system. It was a huge point in accounting evolution.
Italian mathematician and Franciscan monk Luca Bartolomes Pacioli was wrote a book called
‘Method of Venice’ which was the model text book for two hundred years. There for Luca Pacioli was
considered as Father of Accounting. He briefly explained about bookkeeping and principles and
methods of double entry in his first book called ‘Summa de Arithmetica Geometria, Proportionate
Proportionality’
 Pre-analytic Stage
In this stage we can discuss about accounting evolution between 1495 and 1799 AD. In 1504
Luca Pacioli republished his famous book. In this book he explained credit debit determining rules and
journal, ledger and trial balance preparing.
In this period, several methods, concepts and theories were introduced. Going concern concept,
periodic concept, money measurement concept are some of them. Going concern concept was
introduce because of expansion of trade and commerce. Because of introducing going concern
concept, business should concern for indefinite period. But investors cannot wait for indefinite period.
As a solution for this problem periodic accounting was introduced. Only names of liabilities and assets
were not enough for business to express its financial position. Therefore necessity of measurement for
these liabilities and assets were exist. As a result money measurement concept was introduced. In this
time all heads of accounts irrespective of person, institution and materials have been considered as a
personal accounts. Also debtors and creditors were defined.
Some professors and academicians wrote books and articles about accounting and new concept
for accounting. ‘The principle of double entry book keeping’ wrote by Professor Simon Stevin and
Professor Arthury Cayley isone is one of them.

Development or Explanatory Period

Between 1800 to 1950 time include for
this period. In the period new problems were existed
in accounting field. Industrial revolutions, beginning of
joint stock companies, large, multi and wide scale
productions reasoned for this problems. Many
research were begin to find solutions for this
issues. The accounting field got advanced
because of these research.
Books which published before nineteenth
century were incomplete and not perfect for accounting field. They were not appropriate for nineteenth
century business situation. Therefore new concepts, teaching methods and books were introduced. In
this period, basic concepts of accounting were formulated. Therefore accounting field became more
logical.
Industrial revolution did huge impact for the development of the accounting. The small cottage
industries were replaced by large industries and factories. Huge capital cost were needed to build these
factories and buy machines and lands. Assets, liabilities of the industries were increased with huge
amount. Therefore accounting field was more important than before to control and manage these
industries and check whether they get profit or not. Introducing joint stock companies, the accounting
field turned more complicated. Some accounting concept used before the industrial revolution didn’t
suitable and enough to manage accounts. These joint stock companies and large corporation prepared
an annual statements to the public or investors for expose their position. As a result paying dividends
system was introduced.
In this time cost-accounting and depreciation concept became more important because business
concerns became long term. Before industrial revolution these concepts were not consider that much.
To increase efficiency of production, a standard costing system was introduced. From that we can
control cost rather than cost determination. It was a major point in accounting development.
 Development of railways were increased in 19th century mainly in America and European
countries. Huge capital needed for railway developments. Most of them collected by general peoples.
Therefore they needed to be inform about current asset, total capital, and expected cost. Because of
that the total balance sheet was divided to two sections called capital account and general balance
sheet. This method was named as double account system. Large welfare organizations are use this
method.
In this time government regulations for business were more formalized. Therefore it was
necessary to have proper accounting works of the business. It was help to find the position of the
business, check the legality of transactions, total assets of the business, and get an income statement of
business. Due to improvement of taxation on business, the accounting field went to upper level.
Depreciation of assets and valuation of inventories were consisted for tax evaluation of a business.
In this period various economic theories were added to accounting. Economic theories were
useful for cost determination, income determination and assets valuations. Also regulations for the
business in different countries were influence to development of accounting field. Some concepts and
methods were removed and some new concepts and methods were added to accounting system.
In explanatory period various professional institution concern to accounting field were
established. Those institutions helps to keep uniformity of accounting principles, certified the financial
information of business, also get financial advices to the companies. These institutions and
associations were created by unity of accountants. These associations related for specific continents,
countries and regions.
In 1845 accounting associations of Edinburg and Glasgow united in the name of Royal
Charter. In 1867 Eberdin association also joint with Royal Charter. Associations of Manchester,
Liverpool, and London joint together and create a registered association in 1880. Charted accountants
association of England and Wales were established. In 1877 the American Association of Public
Accountants was established. The institute of Cost and Works Accountants of England and Wales was
began in 1919. This associations have been done huge service to the accounting field. An accounting
principle statement were published by American Institute of Certified Public Accountants in 1936. It
was a huge gain in accounting principles. After that in 1940, American Accounting Association issued
another statement mostly similar to before statement. Institute of Cost and Works Accountants of
England and Wales taught and wrote cost accounting methods tried to make relation between cost and
financial accounting.

Modern Period
The time after the 1950 to the present day
belongs to this period. Due to improvement of
science after the World War II, the production
system was changed. These changing was impact
to industries and companies. Therefore
accounting structures also were changed.
Traditional accounting systems not enough for
the modern period industries. They only supply
information to the owners and directors for take small term decisions. In this time various level people
of societies became partners or shareholders on the business directly or indirectly and it became
necessary to inform them about the financial position of the business. Traditional accounting system
failed to do that. So accounting field needed to be updated.
 National and international associations together introduced Generally Accepted Accounting
Principles to keep the uniformity of accounting every areas and it helps to general people to understand
financial information about business. Also in nationally and internationally, accounting standards were
formulated by reputed organizations. To guide these organizations of different countries, International
Accounting Standards Committee was established. Forty one accounting standards were formulated by
this organization.
Since the reversal of society, economy, and technology, different branches of accounting field
were created.
Mechanized Accounting is one of them.
Computers made easier the accounting by keeping
huge number of data in small area and process them to
get more accuracy accounting information. Also it
reduced labour cost for accounting stuffs because most
accounting process done by computers. Tax
accounting is using accounting system for taxation. It
help for both governments and tax payers. Inflation
Accounting systems were introduced as a solution for
money inflation which began after 2nd World War. Human resource accounting is measure and
identifying human resources. This accounting system were created because human resources cannot
measure by money. Government accounting and National Accounting are measuring and identifying
government financial activities and inform the users. Government accounting is benefit to government,
government employers and general people. Responsibility Accounting is check whether industries
done their responsibilities correctly or not. It helps to identify responsibilities of responsible people.

REFERENCE

 Edunote.info@gmail.com. (2018, September 24). History and Evolution of Accounting.

Retrieved February 13, 2019, from https://iedunote.com/accounting-evolution-history

 Bellis, M. (2018, September 10). History of Accounting From Ancient Times to Today.
Retrieved February 16, 2019, from https://www.thoughtco.com/history-of-accounting-1991228

 Beattie, A. (2018, December 20). Financial History: The Evolution Of Accounting. Retrieved
February 20, 2019, from https://www.investopedia.com/articles/08/accounting-history.asp

 Kagan, J. (2019, January 14). Accounting. Retrieved February 20, 2019, from
https://www.investopedia.com/terms/a/accounting.asp